Funding to Artificial Intelligence Startups Reaches New Quarterly High

Though deals to private artificial intelligence companies -- excluding incubator/accelerator rounds -- fell 10% in Q2'16, dollar funding reached an all-time high. That was partly thanks to 3 $100M mega-rounds by companies using AI: a $154M Series A round went to China-based healthcare startup iCarbonX (with the participation of Tencent, Vcanbio), a $100M growth equity round was raised by New Jersey-based Fractal Analytics (from Khazanah Nasional Berhad), and there was a $100M Series D round raised by California-based cybersecurity unicorn Cylance (from investors including Blackstone Group, Insight Venture Partners, and Khosla Ventures). Our AI category includes companies applying AI solutions to verticals like healthcare, security, advertising, and finance as well as those developing general-purpose AI tech. Nearly 70% of the deals went to startups in the United States in Q2'16. A majority of the startups raising funds were still in their early-stages: Nearly 60% of the deals went to startups raising seed/angel and Series A rounds, while mid-stage startups (Series B and C) received 12% of the deals.